Nike’s game plan for Knicks’ Jeremy Lin

Sports giant also unveils product innovations ahead of Olympics

By

AndriaCheng

NEW YORK (MarketWatch) — Athletic-shoe giant Nike Inc., which built its global franchise around the signature shoes and apparel of celebrity athletes including Michael Jordan, is discussing opportunities for the latest star in its stable, Jeremy Lin.

Reuters

Nike’s swoosh logo is barely visible as New York Knicks point guard Jeremy Lin drives to the basket Wednesday against Atlanta Hawks guard Jeff Teague.

The Beaverton, Ore.–based sports-gear company
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which signed the Harvard economics grad when he turned professional in 2010, last week introduced “Linsanity” T-shirts to Foot Locker Inc.
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stores with great success, Charlie Denson, president of the Nike brand, said in an exclusive MarketWatch interview.

That was only a warm-up.

“We are in development of a longer-range plan where we can leverage Jeremy and all the excitement that he’s created in the marketplace,” said Denson, who said he hasn’t talked to Lin but said he’s hoping to see him during the upcoming NBA All-Star Weekend in Orlando. SportsWatch: NBA enjoys post-lockout bounce.

“There are discussions on what we can do with him going forward, whether it’s through footwear or appearances or other opportunities to use his newfound celebrity. On the footwear side, we are trying to do things on a quick-turn basis and others on a long-term basis.”

Nike last summer sponsored Lin on a trip to Taiwan, from which his parents emigrated to the U.S.

Adidas, which holds the NBA apparel license, plans to bring out its own Linsanity jersey across a network of 6,700 stores in China, the Wall Street Journal quoted Adidas Chief Executive Herbert Hainer as saying. Hainer said he’s looking for fresh talent like Lin, who is reported to have a year remaining on his contract with Nike.

Nike’s Denson declined to disclose the company’s contract terms with Lin but said Nike is developing a “long-term relationship” with the Knicks point guard.

“For us to be associated with him right now is a real benefit to us,” Denson told MarketWatch. Nike’s “relationship with him is really strong and really well-defined. He’s not just a flash in the pan. What that means to his relationship with us and how we can leverage that remains to be seen. But we are very excited.”

Michael Jordan–branded retro-style sneakers or the signature shoe line of LeBron James, often priced at $150 a pop or more, have helped to drive traffic to stores such as the Foot Locker chain and lifted full-price demand at Nike even as the economic crisis and lingering concerns about the economy have left consumers broadly budget-conscious.

Nike shares have almost tripled since their lows of March 2009, compared with the S&P 500, which has doubled.

In addition to signature products, the sports giant, which started as a running-shoe purveyor, also is hoping innovations unveiled ahead of the Olympics in London this summer will further engage consumers and give Nike continued pricing power.

At a two-day event drawing at least 200 reporters from around the world to New York, Nike unveiled the key products athletes will use at the Games. They include the company’s lightest-ever basketball jersey and lightest-weight track-and-field speed outfits — both made from recycled plastic bottles.

The most talked-about product: Nike Flyknit shoe, retail priced at $150, the brainchild of a four-year project that, for the first time, allows a sneaker to be knitted together without any material waste. Traditionally, a shoe is made by cutting fabric and other materials and sewing the parts together.

“The Olympics represents the biggest opportunity we have to showcase new products and new innovations,” Denson said, adding that the company’s Flywire support-and-stability feature, introduced ahead of the 2008 Olympics in Beijing, is now used in 60% of its products. “What you see today and what it represents three to five years down the road, there’s a huge opportunity in relationship to the [consumer market]. A lot of innovations that start out as relatively small become large and impactful.”

At the New York event, the company also unveiled Nike-plus basketball and Nike-plus training shoes, which cost up to $250 (about double from the $120 price tag on the original Nike-plus-enabled running shoes). The new shoes come with an embedded device and a pressure sensor in the sole to measure how high players jump and how hard and how quickly they play and train. The sensor also wirelessly transmits data to users’ phones with an app that features games and a social-media function.

“I’m not concerned about our price points,” Denson said. “We’ve not seen any resistance to product prices when we provide consumers the value.”

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